"Are kids smoking Arduinos for a cheap buzz ? Film at 11, back to you, Jim..."

I personally think rosin flux has a kind of pleasant odor, but that's just me. Winding varnish on transformers tends to flare quickly, with only a little smoke, but electrolytic caps can go off like a firecracker if you abuse them just right. Then of course you have the various plastic casings of the components, which are probably not good.. and I am betting that inhaling Gallium, Germanium, and other doping agents is not so good an idea either.

That all being said, it's likely to burn where the "weakest link" is, the smallest trace or wire, or component. Pretty much like a fuse in your house.. a fuse is designed to be the weakest link and so it "burns up" before the wiring in your house does. The point at which the burn occurs, like the fusebox being in the basement, is not really dependant on location- it's more important that it's the weakest link. However, you might look right at the point of the burn and see if there's something right at that point.

Worry not.. electronics as a hobby will provide you many opportunities to breathe the unbreathable...

The nastiest smoke is probably burnt-out LEDs which can have a lot of arsenic and stinks. Burning plastics can give off nasties like cyanide and formaldehyde which cause tissue damage. If it smells bad it probably is bad... Fortunately we're talking about small amounts of smoke here. I hope.

That's a real bummer dude... and you'd just gotten it working. Shame. Personally, after I breath in any sort of plastic smoke my lungs tend to become irritated. Luckily I found a 3M particulate mask some construction worker had left in our garage so now I just use that when smoke might be a problem.

There are a lot of things you are exposed to in life that are toxic, so put things in perspective. Personally I breathe enough 2nd hand smoke, BBQ fumes, and traffic smog on a daily basis that the least of my concerns is some silicon/plastic/(and a little lead) going into my room's air supply.

As for the source of the fire, I would suggest it gives an idea to start. It isn't necessarily the cause. Here's an unrelated example. Let's say you decorate your house with holiday lights. At some point, a power strip you use caught fire.

Did the fire start because of a fault in the power strip? Or was it because of a faulty light strand somewhere else? Isn't it possible one of the light strands shorted out? For the sake of argument let's say that was the case. The power strip caught fire because it was the weakest link in a catastrophic failure. However, it is not an indicator to what caused the failure, just that one occurred....

2nd example: when a fuse blows; did the fuse fail or did something else in the circuit? (sometimes the fuse fails. thankfully, these are rare.)

Whoa, that's pretty impressive damage!I think the worst I've done is blow the lid off a TTL part by putting something way higher than 5V on the VCC pin. Blew the top right off, I could see the die cavity.

Putting 100+ vdc to the input of a +5vdc regulator will do that. You probably took out some filter caps around the regulator also before the flames subsided.

About the only thing worth trying is to remove what remains of the regulator from the board and see if the board will operate on USB power. If so then you have a chance of repairing it, if not you got a nice wall hanging conversation piece.